Against bitter complaints on part of Europe’s independent music sector, the European Commission this week approved Sony’s $1.2bn acquisition of Bertelsmann’s 50% stake in Sony BMG, clearing the way for the group to be renamed Sony Music Entertainment Inc.
As part of the deal, Bertelsmann must take over “selected” European catalogues of music rights from Sony BMG, however, competing independent firms don’t believe this is enough.
Raising the question of what might happen if Apple Computer had acquired EMI, for example, Impala co-president Michel Lambot warned, “They’ve just let the world’s largest consumer electronics company merge with the second largest music company without any detailed investigation.”
The EC’s response is that: “The Commission’s investigation found that the transaction would not lead to any horizontal overlaps in the music recording markets, examined at the creation of Sony BMG, as Sony has no other music recording activities in the EEA.”
Lambot stressed, “It is difficult for us to understand how there can be such a difference between what the Commission says and what the Commission does. Cultural diversity is meant to be properly taken into account in all decisions. Merger control rules must be adapted to cultural industries.”
The original merger of Sony Music and BMG was approved by the EC on July 19 2004. Impala led independent sector protests against the merger, but it was approved again on Oct. 3 2007.